Enterprise budgets are intended to provide guidelines only. They should be used to guide the development of specific budgets for a specific farm situation. They are not intended to be used “as is” without being modified. Budgets are developed by NCSU extension specialists to reflect a fairly typical farm situation, assuming somewhat above average performance and normal growing conditions.
However, on a specific farm soil quality may be above or below average, which affects yields. Different technology or equipment may be used or input costs may be different, for example, because of different pest problems or because poultry litter is available to replace purchased commercial fertilizers.
It is not possible to update budgets every year with current university resources and prices vary from year to year and place to place. Also, note that machinery costs are based on new equipment prices for the year in which the budget was developed. Used equipment has lower ownership costs (depreciation, interest on investment, tax, insurance) but has higher annual repair and maintenance costs.
Labor costs depend on the farm situation. Some activities may require extra hired labor with the associated additional expense. On another farm these same activities might use existing hired farm labor that is under-employed, resulting in no additional out-of-pocket expense. On yet another farm the activity might be performed by the owner. In this latter case, we recommend including a labor charge to reflect one of the following; the cost of hiring someone to perform the work, the minimum return the owner wants for his time, or the value of his or her in some other activity, including leisure. In economic terminology this is an attempt to measure the opportunity cost of the owner’s labor.
“Estimating Farm Machinery Costs,” Ag Decision Maker A3-29, Iowa State University, University Extension, April 2002 is a useful publication explaining machinery costs that can be found on-line at http://www.extension.iastate.edu/agdm/crops/html/a3-29.html
Forage Budgets – Printable Versions (PDF)